8. The sudden decline in home sales is extremely worrisome for the housing market.
“In Greater Vancouver residential property sales are 41.6% lower than the 10-year average.”

9. And it doesn’t help that Canada’s sub-prime market is “booming”.
Canada’s sub-prime mortgage industry is growing and there are $500-billion in high-risk mortgages in the Canadian housing market. That is nearly 50% of the market.
Moreover, the Canada Mortgage and Housing Corporation (CMHC) which insures all mortgages approved by banks, has a legal limit of $600-billion for mortgage insurance, and this limit has already been raised twice since the end of 2007.
“If these high risk mortgages run into problems, the Canadian taxpayers are the ones on the hook for the loss of investment on what could prove to be toxic assets. In addition to the CMHC, the government also insures 90% of the portfolios of Genworth MI Capital and Canada Guarantee. When taking these corporations into account, the Canadian people have over 1T in exposure to insured mortgages.”

10. The debt to disposable income ratio for Canadian households is at nearly 155%. Household debt in the U.S. was at 160% before its economic crisis.

11. The use of Home Equity Lines of Credit (HELOCs) has also been worrisome.

12. David Rosenberg thinks Canadian houses are carving out a top as U.S. homes are carving out a bottom.

13. Robert Shiller is worried “that what is happening in Canada is kind of a slow-motion version of what happened in the U.S.”.

14. Regulators have been changing policies to cool the housing market…

I know it’s a sidebar to prices in the media but I would put as much weight to sales volumes as I would to prices in terms of impact on the economy. In bouts where prices fall, sales volumes drop — sometimes substantially — and those whose remuneration is tied to sales volumes will see their incomes drop as well.

On national scale- Yeah, many regions won’t see a huge drop in prices. It might set the clock back a couple of years and some people might find themselves underwater but using national average numbers the adjective “mild” won’t be too far out. But in overheated markets like Vancouver and Toronto, the correction will be much greater.

According to the latest data from Will Dunning, Chief Economist of CAAMP, less than 4 in 10 buyers have 20% down payments.

For those purchasing from 2010 through spring 2012:

41% had less than a 10% down-payment
21% had a 10-19.99% down-payment
Only 39% put down 20% or more.
(This survey included both first-time and repeat buyers. First-time buyers accounted for 56% of the dataset. Totals don’t add to 100% due to rounding.)

Well, some sources have been saying that a significant fraction of the population has neither a receptacle to micturate into nor a fenestration to cast it out of.

It’s become harder and harder for the truly wealthy to differentiate themselves. Asking for the grey poupon no longer cuts the mustard, though driving an immaculate automotive luxo-barge old enough to be difficult to finance and expensive to repair still seems to work. Pip pip!

Another Thanksgiving, another housing discussion. Another insistence that in no way can prices drop more than 10% or so; I didn’t argue. If it doesn’t, I said, then there’s no reason to ever buy. Suggestion for us to buy and consider commuting. My laughing assertion that our landlord was funding our carefree renter lifestyle was a bit uncomfortable, like I’d farted in an elevator. Suggestion that speculators were a tiny part of market was countered by my own stories of my generation buying housing too small for their needs. (If inappropriately sized housing far away from our employment is a ‘good’ financial plan, even though we’d have to stop saving for RRSPs and RESPs and our housing and transportation costs go up, there’s some manner of belief that the investment will return something to compensate for our diminished savings and lifestyle.) Left with the sense, again, that I should keep my lip zipped… Sort of want a crash just so that these discussions end.

Prices may grind down for a few years. Finally you’ll figure it’s time and start shopping. One of your stink bids will get accepted. And the next Thanksgiving, they’ll all say they knew you’d come around eventually, and why on earth did you wait so long?

No. They’ll say ‘now is a terrible time to buy. Prices are so low & won’t recover for years.’ When you hear that you’ll know it is the perfect time to jump into the market. Happy thanksgiving. I give thanks for financial literacy. And for our kind host.

I’m quite happy seeing my work reposted. If I didn’t want the message out, I wouldn’t have a blog. In this case, I find it interesting that someone went through the effort to actually remove the website embedded at the bottom of the chart. How rude!

Note this is a Business Insider article, syndicated in the FP. It was originally one of their signature slideshows – Why do they do slideshows? Something to do with getting more page views? This broken chain of attribution reminds me of the Zerohedge quip that people are graduating with degrees in “Ctrl-C, Ctrl-V”.